Crowdpear Review 2023: a Regulated Crowdlending Platform
Last Update: Fri, Aug 11 2023
I love to diversify my real estate crowdfunding investments on as many great platforms as possible. In this article, I will review the crowdlending platform Crowdpear, which I added to my portfolio in 2023.
In the article, I will tell you what I think are the biggest strengths (and weaknesses) of the platform, how to start using it, and what you can expect from investing on the platform. Let's start!
What is Crowdpear?
As for all crowdlending platforms, Crowdpear is a financial platform that matches borrowers with investors, that will lend money on the platform in exchange of interests on loans. Crowdpear is a relatively new platform, as it was founded in 2021. They are based in Vilnius, Lithuania.
What makes them different from other similar platforms is that they offer investors to invest in real estate (like houses or apartment blocks), but also in business loans - all on the same platform. This is something quite unique about this platform, and I believe it makes it really interesting.
It's also worth noting that the platform is actually not completely new - as it's the same shareholders and people as PeerBerry - one of the largest Peer-to-Peer lending platform in the field. This adds a good level of confidence to this platform, as PeerBerry has a very solid track record in the field.
They currently have over 3000 investors, with nearly 2 million Euros already invested on the platform.
What returns can I expect from investing on Crowdpear?
The returns you can expect on Crowdpear completely depend on which projects you invest in, which I will tell you more about when we'll see how to use the platform.
Currently, you can get up to 12% returns on the platform, and they advertise an average annual return of 11.23% for investors, which I will of course verify in this review and by investing on the platform.
Is it safe to invest on Crowdpear?
The question of the safety of the investors funds is central when investing on a crowdlending platform, as they will be managing all the money that you deposit on the platform and invest it in the projects. When checking a new platform, I look at three things: what the platforms offers in terms of guarantees, the company itself (and their team), and finally the originators of the projects present on the platform.
Risks & guarantees on Crowdpear
On Crowdpear, all real estate projects present on the platform are backed by property, that will be taken in case there is a problem with the project.
The LTVs (Loan To Value) on the platform are usually around 70%, meaning that the amount of the loan of a given project is always much than the value of the asset attached to the project. This means that in case of a problem with a project, the asset that will be sold to cover the loan will be more than enough to give the money back to investors & to cover all the legal costs associated with the sale. This is actually is bit too high for my own taste, and I would prefer to see projects with lower LTVs here so there is more room to get all your money back in case of a default.
What's really worth noting here is that Crowdpear actually has the European ECSP license - meaning it's a fully regulated crowdfunding platform under EU law.
They also do a very strict process of cherry-picking the best projects that they put on the platform, which we'll cover more in details when talking about the projects that are present on the platform.
The company & the team
As I mentioned earlier, the company is operating from Lithuania, and as for all platforms I add to my portfolio I checked if the company was officially registered in Lithuania, and it indeed.
They also are completely transparent about their team on their website, with a complete description of the role of each person in the team, which is also something I appreciate seeing on a platform.
I also check the profile of their CEO, Vytautas Olšauskas, and his LinkedIn page shows he has experience in the banking sector for over 15 years, having founded its own bank as well.
Their Chief Business Development Officier, Arunas Lekavicius, is also well known as he is actually the CEO of PeerBerry.
Overall, it's safe to say that the platform is in the hands of a team of experienced professionals, all with a link to PeerBerry that is a platform I trust for many years now.
I also always have a close look at where the projects on the platform are coming from, as this is usually where a platform will start to have issues if anything bad happens like a financial crisis.
On Crowdpear, the projects are coming from borrowers that apply to a loan via the platform, and that are then approved after passing the strict checks from Crowdpear. For example, they check the financial data of the project, but also the proposed collateral, and the track record of the borrower in the field of real estate development projects.
Getting started with Crowdpear
It is actually really easy to get started with Crowdpear and have your money start generating interests on the platform.
The first step is to open an account and get verified. This was done really quickly, and including the ID verification part it was all done in under 5 minutes.
Next, you will have to deposit funds in your account to start investing in loans and generate interests. This is also really to do with Crowdpear, as you can do it via a bank transfer.
Once this is done, you can actually start investing in loans on the platform. For that, the first option is to check the primary market:
From there, you can immediately see what projects are currently available, and get some details about the loans like the annual return, LTV, and term. Note that the minimum investment amount is 100 Euros, which is similar to other platforms in the field.
If you want more details, you can simply click on the projects you want to get more information about it:
On those pages, you will find much more details about the project, like details about the borrower, why the money is needed, and also what additional guarantees are provided.
The nice thing about Crowdpear they also have a secondary market, where you can buy shares in projects that are already running. When I first started to use Crowdpear, there was a more projects available on the secondary market than on the primary market:
Note they also don't have an auto-invest function so far.
As for all the platforms I review, I also tried to withdraw money, and the money was back on my account in just 2 days.
My Results so far with Crowdpear
I only invested in one real estate project so far on Crowdpear, and it should give me a return of 10.5% annually. It is of course too early to talk about long-term yields on the platform, but I can say that so far everything went smoothly and I will definitely invest more on the platform in the future.
Should You Invest on Crowdpear?
Overall, I can say I really liked the Crowdpear platform. I always like to invest on a good real estate crowdfunding platform, and I really like the fact that here it is actually backed directly by PeerBerry, and also that they have the European Crowdfunding license. I would have liked to see more projects on the primary market, and also an auto-invest function. Definitely a solid real estate platform that I recommend adding in any portfolio.